How Shopify’s Frenzy App is Disrupting How We Buy Exclusive Product
About 500 people were drawn to Elysian Park in Los Angeles in June of 2017 because of the directions they received from an 1-800 number that was listed on a billboard. Upon calling, those individuals were given directions to Elysian Park through Morse Code. So, why did they go to Elysian Park?
On June 10, 2017, Frenzy, a flash sales app, held its first drop zone at Elysian Park. A drop zone is a specific location customers go to for access to exclusive merchandise.. For this event Frenzy partnered with Anti Social Club, a streetwear company to sell an Antisocial Social Club limited-edition sweatshirt online. For customers to participate in the flash sale, they had to meet a few requirements including showing up at the drop zone location, downloading the Frenzy app, installing Apple Pay on their mobile phone and they had to follow Frenzy on social media. Once this criteria was met customers checked-in to their location at Elysian Park and were granted the ability to purchase the exclusive sweatshirt online.
The main target for this event were males ranging from 16 to 28 years old who have a keen interest in technology and social media. Without that a potential customer may not have wanted to follow so many steps (including enabling location services on their phone) in order to purchase a product. The main intent for the event was for customers to meet other customers who shared similar fashion interests in order to create a community of like-minded individuals. The level of exclusivity of the event was achieved through targeting a narrow segment of the population which also created a certain level of hype that is associated with limited release drops. If a brand has a direct-to-consumer business model and does not have stores this type of event can also be a great way to foster a sense of community with like minded individuals.
Frenzy currently has approximately 6,000 users and is looking to host more drop zones in other places such as New York, Chicago and across Europe. Shopify created Frenzy during one of its “hack days” where every employee works on a creative engagement instead of their daily tasks. During a hack day, employees came up with Frenzy – a mobile app that improves flash sales. Employees found that many customers were having issues with flash sales – limited time to purchase a limited-edition product online – since bots were buying merchandise in bulk and then people were reselling the items at a higher price. This is similar to when scalpers purchase a great quantity of tickets online for concerts and then it’s hard for the general public to have access to those tickets because they are resold at much higher prices.
Shopify is pitching Frenzy to other retailers in the hopes that this idea will grow and will allow customers to more easily connect with retailers to get the products they want. Shopify is pitching Frenzy to retailers such as Yeezy, Love Your Melon, and more. Frenzy is focusing on the fashion streetwear segment since it is growing and has a lot of potential. Fashion streetwear is heavily fueled by influencers and social media, especially Instagram, which has helped to grow this market exponentially.
This example demonstrates how limited-edition items often create a need within customers that may not have existed before with customers often impulsively buying items since flash sales are only on for a limited time or until quantities last. Shopify’s Frenzy app hopes to tap into this need and adding a physical location element into the mix provides additional value to customers by turning the experience into a fun event. Since millennials enjoy experiences this is a great way to add an element of fun to an experience (trying to buy limited edition merchandise) that at times can be frustrating for customers.